Starting this year, the requirement to file a corporate governance report has widened from KOSPI-listed companies with assets of 500 billion won or more to all KOSPI-listed companies. Sustainability management reports, previously a voluntary disclosure item, also become mandatory. During the same period, the United States and Japan are lightening quarterly reporting obligations. How to weigh the burden of disclosure against the usefulness of the information has emerged as a task for designing the system.
The expansion schedule does not stop this year. From 2027, all KOSPI and KOSDAQ listed companies must file information security disclosures, and all KOSPI-listed companies and large KOSDAQ companies must adopt English-language disclosure. The threshold for disclosing treasury stock holdings has been lowered from 5 percent or more to 1 percent or more, and the frequency of disclosure has increased from once a year to twice a year. From the second half of 2025, serious accident items have been included in annual and semiannual reports.
Work on the standards for introducing ESG disclosure is under way. What the final version will contain and when it will be confirmed have not been determined. Whether the scope of the mandate will be applied in stages according to asset size is also difficult to state with certainty at this point.
The trend abroad runs the other way. Britain abolished the quarterly report requirement in 2014, and France and Germany did so in 2015. From 2024 Japan abolished the requirement to file quarterly reports under the Financial Instruments and Exchange Act and consolidated it into the quarterly earnings summary (kessan tanshin). In the United States, the Long-Term Stock Exchange (LTSE) petitioned the Securities and Exchange Commission (SEC) in 2025 to change quarterly reporting to semiannual reporting, and President Donald Trump also instructed the SEC to review a revision of quarterly disclosure.
Cost was presented as the basis for the petition. Preparing a single quarterly report costs 100,000 dollars and 1,000 hours. The basis for calculating this figure and the size of the companies covered have not been disclosed. In Korea as well, the view has been raised that the requirement to file quarterly reports under the Financial Investment Services and Capital Markets Act should be abolished and the provisional earnings disclosure system under the exchange's disclosure rules used instead, but it has not been settled as policy.
Actual levels of compliance ahead of the mandate vary by industry. The ESG Happiness Economy Research Institute analyzed sustainability management report disclosures at 32 pharmaceutical and biotechnology companies among the top 250 companies by market capitalization, and found that the exchange disclosure rate, based on reports issued as of the end of November 2024, was 33.3 percent. The rate of conducting double materiality assessments among them was 54.5 percent. Even among the companies that disclosed reports, two, Classys and GC Biopharma, did not conduct a double materiality assessment.
In the same industry, 13 companies besides Hugel and Peptron did not issue reports. That was the largest number of non-issuers among the industries analyzed. The size of the burden companies will bear also differs depending on whether items being converted to mandatory disclosure can be filled with work they have already been doing in practice, or whether new procedures must be built.
International standards are also widening their scope. GRI released an update on Jan. 26, 2026 (local time) covering its standard-setting activity for the first quarter. The GRI 101 biodiversity standard and the GRI 14 mining sector standard took effect on Jan. 1, 2026, and companies within their scope must use them. Public comment runs until April 10 on draft revisions to three economic standards covering corruption, fair competition, and public policy and lobbying activity, and until March 9 on draft revisions to labor standards covering forced labor, child labor and freedom of association.
The Global Sustainability Standards Board (GSSB) released a draft work plan setting out standard-setting priorities for 2026-2028. It includes completing the labor, economic impact and pollution standards, expanding sector standards, and beginning a new digitalization standard. A content index template for users of sector standards has also been newly released, and the biodiversity, climate change and energy topic standards revised in 2024-2025 have been reflected across the existing sector standards.
As disclosure items increase, companies' internal management systems change with them. The European Sustainability Reporting Standards (ESRS) include whether an internal carbon price (ICP) is used and how it is reflected in decision-making as disclosure items. SK Inc. applies an ICP to investment feasibility reviews for long-term projects such as new data center construction to calculate the potential cost of greenhouse gas emissions, and reflects this in investment and business decisions. Naver applies an ICP even to the choice of work devices for employees, providing information on the environmental impact of each product.
TheY Inc., which analyzed trends in domestic and international ESG reports in 2025, noted in a post published on Jan. 31 that the expansion of disclosure and management requirements is increasing the budget and staffing burden on companies. No estimate in money or hours has been presented for how much Korean listed companies actually spend. Calculations like the one contained in the U.S. petition have not appeared as a point of comparison in domestic discussion.
The immediate schedule is set. Comment on the GRI labor standards closes on March 9, and on the economic standards on April 10. In Korea, information security disclosure and English-language disclosure are due in 2027, and the final version of the ESG disclosure standards remains at the discussion stage.
Both those adding reporting obligations and those cutting them have to answer the same question. What information do investors actually read and use.
